Outlook for Arabian Gulf property sector largely positive

Moody's Investor Service has evaluated prospects for the Arabian Gulf's property sector as broadly positive in its new Industry Outlook report, the first devoted to the Gulf region. While acknowledging various sector risks the report anticipates sustained regional market growth largely based on demand for housing, office and retail space outstripping supply in the medium-term.

Philipp Lotter, senior credit officer at Moody's Middle East Limited in Dubai (DIFC) and author of the report, commented: 'Supported by both rapid economic growth, the Arabian Gulf region today incorporates some of the most unique and ambitious projects in the world, limited not to individual sites, but indeed creating entirely new cities and land stretches. However, accurate analysis of the market is made extremely difficult by the still sketchy nature of official information, only gradually evolving regulation and the significant differences in market estimates, depending on the source.'

Among the major trends Moody's has identified in the report are the close ties between real estate sector evolution and government support and initiative. Large-scale availability of land, often offered at favourable prices to developers, is another important factor. Exposure to one country or city, and confining operations to a handful of very large projects has negatively effected companies' creditworthiness.